Answer:
The Dursleys didn't have a direct conversation on this matter in the book. But when hagrid came to pick up Harry, and tells him about his parents then Harry mentions that the Dursleys have told him that his parents died in a car crash.
The reason I think they kept him in the dark is pretty obvious, that they hated the magic world, pretty much because of Petunia, as she was jeoulous that her sister (Harry's mother) was a witch and got admitted to Hogwarts and she didn't and they wanted to keep Harry away from that as they didn't want anymore of that "nonsense" and wanted to live a happy ordinary life.
Explanation:
The answer is C. Hope I helped :)
To be honest, it's a little confusing myself, hehehe. But I believe that C might be the right answer or B. You might have to wait for other answers besides mine.
he had witnessed during his World War II service.